November 7th – Elections, an FOMC Meeting, and More Chop
It has been difficult trading or investing for the Buy & Hold group. October was a drop into our ICL , and it was a deep one. Since then, we have seen a lot of choppiness heading into the U.S. Elections. Markets do hate uncertainty. Now that that will be behind us, we still have an FOMC Mtg scheduled for Wednesday & Thursday of this week, so unless we get a strong reaction higher when the results of the elections are released, maybe we should just expect a bit more choppiness . Let’s review our market sectors…
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SPX – After an A-B-C type sell off , this looks like an ICL is in place and we are on day 6. Resistance is right above, so the elections results could push price through. Markets do not do well in uncertain times, so the post election results could help the markets.
I will proof read this report after I release it. I want to release it by 8 am Eastern.
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NASDAQ – Pop & Chop for the Nasdaq so far. With elections jitters gone, Post election results could push this higher , the markets hate uncertainty. TQQQ, UPRO, etc became a buy and it is still early in the daily cycle.
WTIC – Oil is very due for an ICL, we are on day 57 with a possible reversal candle, and as mentioned yesterday, The XLE is no longer selling off with Oil. Wednesday is inventory day, and I would have to expect a move higher Wednesday or Thursday at this point.
XLE – This looks NOTHING like Oil. It is leading the way higher, and I expect Oil to reverse direction soon too.
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PLEASE READ THIS GOLD NOTE– We are now seeing a pretty long amount of time pass since the AUG ICL. We need a push higher sooner than later. With that Aug ICL came an extreme Bullish COT, extremely negative sentiment (Bullish) , etc, but as almost 3 months pass, WE REALLY NEED TO SEE GOLD GET GOING, BECAUSE ANOTHER ICL COMES DUE IN ROUGHLY 5 or 6 MONTHS FROM THE AUG ICL. JAN OR FEB may be that time. That said, I am going to again begin to discuss a short term bearish scenario too. The COT is still Bullishly low on smart money shorts, so a drastic sell off seems less likely, maybe we would see more of a prolonged sideways Base like the summer of 2015 for Miners. That said, I will show a drastic sell off scenario too, just to mentally prepare a Bullish or Bearish case.
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I will start by saying, GOLDs BASE ABOVE THE 50SMA IS NOT BEARISH. This can become a healthy base, but I must say that cycle-wise, we are slowly running out of ‘time’. Again, this looks like a normal healthy base, but ‘Time’ concerns me after a while – I will explain.
GOLD – It is really becoming ‘Do or Die time’ for Gold. We have seen a few good 1 day pops, but no big follow through. On this chart, I am simply looking at how the Accumulation / Distribution Box –
1. It ramped higher out of the V-Bottoms,
2. In 2015- 2016, as the base formed, it actually dropped for a while, similar to now, until a rally unfolded
3. Currently A / D is dropping after the POP and that doesn’t look healthy. We really need to see something backing up Gold here, we need solid buying push prices higher, since we will see this drop into an ICL later. Let’s just put it this way…
GOLD – I was going to wait until the weekend report to discuss a short term Bear scenario, but I changed my mind with an FOMC Mtg this week. I will point it out here again like I did at the end of October, and I will discuss further in the weekend report. It is all about ‘Time’.
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In August, Everything pointed toward GOLDs LOW as being THE ICL LOW of opportunity. The COT was extreme, Sentiment was at Extremes, etc etc. But as time goes on, we now find ourselves 3 months ahead of that ICL. Another ICL should be due in January? – February? (ish). The COT seems to argue against a big drop, but let’s just look at that possibility for mental preparation.
GOLD BEARISH VIEW – Look at the trend line break and then a back test. Gold needs to POP above this trend line for it to be a ‘shake out’ and run to $1350, and then back test the line at the next ICL, or this will just be a back test of that break down. Gold moves very fast when it runs, and we know that it can do $100 in mere days, so It CAN break above this, but needs to do it sooner than later. A $100 move higher from here would put Gold at $1325 fairly quickly.
GOLD BULLISH VIEW – We have seen short ICL drops where the Magenta arrows are. So it is still possible to break higher above the trend line and then drop into a shorter ICL back testing that trend line as a shake out. That said, we really need a run higher in Gold soon, due to the ‘timing’. See the Green Box, the 2nd daily cycle CAN be strong.
SO I WILL DISCUSS THIS BULL OR BEAR SCENARIO IN THE WEEKEND REPORT. Maybe with U.S. elections now in the past, and this FOMC Mtgs passing soon, Things will begin to move more clearly.
GDX – And GDX looks like a back test too, if it cant POP back inside and make this a shake out.
GDX #1 – This looks like day 4 of a second daily cycle.
GDX #2- A day 21 DCL ( less likely, that would be a short first daily cycle), and this would be late in the 2nd daily cycle. THIS WOULD REMIND ME OF THE SUMMER OF 2015 BASE…
IN OCTOBER, I SAID THAT THIS WOULD REMIND ME OF THE SUMMER OF 2015 BASE. I used these 2 charts 2 weeks ago to show how it may look. A complex base (Choppy sideways and not really a deep sell off). This is possible.
So we still have some individual Miners looking Bullish ( ABX , AU, etc), but this has been a choppy sideways move. It is possible that the FOMC meeting can POP Gold higher. I will discuss Precious Metals in more detail this weekend. We have also had a choppy run out of the ICL in the general markets too, but now that we have the US elections behind us, it is possible that the markets will begin to take on a more decisive directional move. Markets hate uncertainty, and this week will clear up a lot of uncertainty.
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Enjoy your Wednesday trading.
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~ALEX
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NAK – NAK began to run higher after quickly selling down at the end of October. That looks like a shake out.
I SOLD MY NAT, MAYBE A BIT EARLY, BUT WANTED TO LOCK IN GAINS HERE
TLT by request – It looks longer term weak under the weekly 200sma
